Our Real Estate Blog

Mortgage Rates (6/28/2010)

June 28th, 2010 11:42 AM by Lehel S.

Monday's bond market has opened in positive territory after this morning's economic data gave us mixed results. The stock markets are showing minor losses with the Dow down 15 points and the Nasdaq down 11 points. The bond market is currently up 16/32, which should improve this morning's mortgage rates by approximately .250 of a discount point over Friday's morning rates.

This morning did bring us a relatively important economic report with the release of May's Personal Income and Outlays data. It showed that personal income rose 0.4% while spending rose 0.2%. The income increase was weaker than expected and can be considered good news for bonds. The spending reading was slightly above forecasts, meaning consumers spend more than thought. This is negative for bonds and mortgage rates, but traders are ignoring that portion of the data this morning.

Tomorrow's important data is June's Consumer Confidence Index (CCI). It is important to the finan cial markets because it measures consumer willingness to spend. If consumers are more confident about their own financial situations, they are likely more apt to make large purchases in the near future. If it shows a sizable increase in confidence from last month, we can expect to see the bond market falter and mortgage rates rise slightly. Current forecasts are calling for a reading of 62.0, down from last month's 63.3 reading.

Overall, tomorrow and Thursday's data should bring some volatility in trading and mortgage rates, but Friday's Employment report is definitely the most important of the week. Its impact can single-handedly lead to an improvement or increase in mortgage rates for the week. Next Monday is when the Independence Day holiday will be recognized. There is no early close for the bond market Friday ahead of it, but it will probably be a light afternoon in trading as traders head home for the long weekend. This could lead to additional volatility during morning trading, particularly with the Employment report being posted. So, I strongly recommend that you maintain contact with your mortgage professional if still floating an interest rate.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.